Last week international leaders met at COP23, the second “conference of the parties” since the signing of the Paris Agreement. They were meeting to discuss what global climate policy will look like both before and after 2020, when the Agreement officially goes into effect. President Donald Trump’s announcement earlier this year that he plans to withdraw the United States from the Agreement set the tone of the discussions for the official US delegation. However, they were not the only Americans present in Bonn. An unofficial delegation of citizens traveled to the conference, also to represent the United States and to deliver a simple message to the rest of the world: we are still in.

Acitvists gather in Bonn ahead of COP23 summit

This second delegation delivered the America’s Pledge Phase 1 report, detailing the efforts of committed citizens to uphold the standards agreed to in Paris in 2015, in spite of the federal government’s withdrawal. This comprehensive report discusses the success of the U.S. Climate Alliance (of which Colorado is a proud member and CEA is a proud supporter) and other coalitions that are dedicated to picking up the banner of climate action where the Trump administration has let it fall. This We Are Still In delegation, collectively representing more than half of America’s economy, detailed the steps they have taken to begin working from the bottom up to achieve the 2025 U.S. emissions outcomes asked for by the Paris Accords, and promised additional analysis in a Phase 2 report to be published in 2018.

As US climate leaders proudly declared their intentions in Bonn, a smaller group of local activists met in Denver to deliver a petition to Xcel Energy at their local headquarters, asking the utility to take the next step towards the post-fossil fuel world. This group was led by 350 Colorado and the Colorado Coalition for a Livable Climate, which represents Clean Energy Action and 22 community, faith, and environmental organizations from around Colorado. Our requests included

the closure of all Xcel coal plants by 2030

the closure of all fracking gas plants by 2035

a commitment to convert to at least 80% renewable sources of electricity by 2030

completion of a study by the end of 2018 that explores how to achieve 100% renewable electricity in Colorado by 2030

The CCLC represents more than 100,00 Coloradans, and this petition represents the work of countless climate warriors across the state who believe that now is the time for Xcel to end their lifelong reliance on coal and natural gas. “Xcel Energy has a great opportunity to move away from fossil fuels and provide customers with the affordable, clean energy they’re demanding,” said Kevin Cross, a member of the Fort Collins Sustainability Group and a leader of CCLC. As American leaders announce our renewed commitment to the Paris Agreement in Germany, there is no better time for our electric utility to step up its commitment to providing cleaner, cheaper energy for our state.

On the same day, separated by an ocean and thousands of miles, two coalitions delivered two statements to which Clean Energy Action was a party. In May, we asked our supporters to sign a petition to Governor Hickenlooper to sign Colorado onto the US Climate Alliance, and we see the effects of those signatures in Bonn where Colorado is one of nine states fully committed to the coalition. More recently we asked our supporters to affix their names to the CCLC’s petition to Xcel, and our voices were heard loud and clear in Denver last week demanding a greener, more efficient future. We thank the Colorado Coalition for a Livable Climate, the We Are Still Coalition, and the US Climate Alliance, but most of all we thank all of you who provide the citizen power that carries us forward.

David Pomerantz will be speaking about the shocking story of electric utilities’ knowledge and cover-up of climate change beginning half a centuryago. Clean Energy Action believes that it is critical that the public hear what Mr. Pomerantz has to say, so this event is free and open to the public. Please join us and invite others!

Xcel Energy has launched a bid to stop Boulder’s 7-year effort toward municipalization in its tracks. One April 17th, the Boulder City Council considers two proposals from Xcel designed to dissuade us from our quest to control our own energy destiny.

Two days later, on April 19th, the Public Utilities Commission is holding an equally critical hearing on a motion to dismiss Boulder’s municipalization case outright.

We need your help to keep municipalization alive!

This is a critical moment for the future of independent municipal utilities in Colorado, so we ask not just Boulder residents but all Coloradans to step up to the plate.

Email the PUC at dora_PUC_complaints@state.co.us​​ with your support for Boulder’s constitutional right to form a municipal utility. A few things to mention:

Communities should have a right to determine their energy future and should not be constrained by Xcel’s thinking and corporate constraints

Under the law of Colorado, Boulder has a constitutional right to form a municipal utility, and it is up to the Commission to protect that right, and make sure it means more than words in a statute book

At this defining moment in the history of our planet, we need more options than a profit-driven monopoly that remains dependent on fossil fuels for more than 70% of its power generation.

We also ask our supporters to contact the City Council at council@bouldercolorado.gov and tell them to stay the course! We encourage you to remind them that:

Boulder Energy Future has worked for seven years to build a realistic, reasonable alternative to continued partnership with Xcel.

Boulder voters have weighed in on this issue not once but several times. In ballot measures in 2011, 2013, and 2014 Boulder’s residents asserted their demand to control their own energy future.

The two deals proposed by Xcel are both unacceptable, and do not reflect the best interests or desires of the rate-payers of Boulder.

Most importantly, there is a Stay the Course Rally outside the Municipal Building at 1777 Broadway, Boulder CO 80302 from 5:00-6:00 pm before the City Council hearing on Monday April 17th. Please come and show your support for Boulder’s Energy Future and the municipalization effort. Wear green and bring signs or posters. A couple ideas for signs and poster slogans:

“STAY THE COURSE!”

“Just Say NO (To Xcel)!”

“Don’t Give Away Our Energy Future!”

Finally, we ask all of our supporters to be polite and respectful when communicating with the PUC and the City Council. We cannot overstate the importance of addressing our officials in a way that is clear and concise, and also gracious and polite.

The effort to decarbonize Colorado’s largest electricity supplier, Xcel Energy, advanced in Denver last month as Coloradans lined up to speak at the Colorado Public Utilities Commission hearing on Xcel’s 2016 Electric Resource Plan. Members of CEA led Coloradans from all walks of life in voicing their concerns about Colorado’s electricity future.

The hearing room at the Public Utilities Commission was overflowing as the people of Colorado addressed the three PUC Commissioners. They expressed a host of concerns about Xcel’s plan, and asked for more focus on the abundance of cost-effective renewable energy available in Colorado, in accordance with Colorado’s laws and regulations.

The PUC is a part of the Colorado Department of Regulatory Agencies, and is responsible for regulating many parts of our state’s utilities, transportation, and telecommunications.

Citizen witnesses also discussed the need to analyze the choices between renewable energy (with no future fuel costs) and fossil fuel resources (with billions of dollars of future fuel costs) using lower discount rates. A lower discount rate will show increased savings from cost-effective renewable energy because future fuel costs won’t be so heavily discounted.

Discounting the approximately $60 billion in future fuel costs associated with Xcel’s Electric Resource Plan at Xcel’s Weighted Average Cost of Capital (“WACC”) will have the effect of shrinking these future fuel costs and also shrinking the savings that will come from cost-effective renewable energy resources like wind and solar that don’t have future fuel costs.

More details on Xcel’s Electric Resource Plan and the key issues, including the importance of the choice of discount rate, are available in the public comment filing made by Clean Energy Action Board member Leslie Glustrom.

CEA is grateful that the new appointees to the Colorado PUC , Chairperson Jeff Ackerman and Commissioner Wendy Moser, along with Commissioner Frances Koncilja, are dedicated to hearing from the public and that the public is well enough informed to provide useful and compelling testimony!

You can also check out Christi Turner’s comprehensive article in Boulder Weekly and learn more about this important step froward in the fight for cheaper, cleaner power.

Utility revenue decoupling is often seen as an enabling policy supporting “demand side management” (DSM) programs. DSM is a catch-all term for the things you can do behind the meter that reduce the amount of energy (kWh) a utility needs to produce or the amount of capacity (kW) it needs to have available. DSM includes investments improving the energy efficiency of buildings and their heating and cooling systems, lighting, and appliances. It can also include “demand response” (DR) which is a dispatchable decline in energy consumption — like the ability of a utility to ask every Walmart in New England to turn down their lights or air conditioning at the same time on a moment’s notice — in order to avoid needing to build seldom used peaking power plants.

For reasons that will be obvious if you’ve read our previous posts on revenue decoupling, getting utilities to invest in these kinds of measures can be challenging, so long as their revenues are directly tied to the amount of electricity they sell. Revenue decoupling can fix that problem. However, reducing customer demand for energy on a larger scale, especially during times of peak demand, can seriously detract from the utility’s ability to deploy capital (on which they earn a return) for the construction of additional generating capacity. That conflict of interests is harder to address.

But it’s worth working on, because as we’ll see below, DSM is cheap and very low risk — it’s great for rate payers, and it’s great for the economy as a whole. It can reduce our economic sensitivity to volatile fuel prices, and often shifts investment away from low-value environmentally damaging commodities like natural gas and coal, toward skilled labor and high performance building systems and industrial components.

The rest of this post is based on the testimony that Clean Energy Action prepared for Xcel Energy’s 14AL-0660E rate case proceeding, before revenue decoupling was split off. Much of it applies specifically to Xcel in Colorado. However, the overall issues addressed are applicable in many traditional regulated, vertically integrated monopoly utility settings.

Why can’t we scale up DSM?

There are several barriers to Xcel profitably and cost-effectively scaling up their current DSM programs. Removing these impediments is necessary if DSM is to realize its full potential for reducing GHG emissions from Colorado’s electricity sector. Revenue decoupling can address some, but not all of them.

There are the lost revenues from energy saved, which impacts the utility’s fixed cost recovery. If the incentive payment that they earn by meeting DSM targets is too small to compensate for those lost revenues, then the net financial impact of investing in DSM is still negative — i.e. the utility will see investing in DSM as a losing proposition. Xcel currently gets a “disincentive offset” to make up for lost revenues, but they say that this doesn’t entirely offset their lost revenues.

Even if the performance incentive is big enough to make DSM an attractive investment, the PUC currently caps the incentive at $30M per year (including the $5M “disincentive offset”), meaning that even if there’s a larger pool of cost-effective energy efficiency measures to invest in, the utility has no reason to go above and beyond and save more energy once they’ve maxed out the incentive.

If this cap were removed, the utility would still have a finite approved DSM budget. With an unlimited performance incentive and a finite DSM budget, the utility would have an incentive to buy as much efficiency as possible, within their approved budget, which would encourage cost-effectiveness, but wouldn’t necessarily mean all the available cost-effective DSM was being acquired.

Given that the utility has an annual obligation under the current DSM legislation to save a particular amount of energy (400 GWh), they have an incentive to “bank” some opportunities, and save them for later, lest they make it more difficult for themselves to satisfy their regulatory mandate in later years by buying all the easy stuff up front.

It is of course the possible that beyond a certain point there simply aren’t any more scalable, cost-effective efficiency investments to be made.

Finally and most seriously, declining electricity demand would pose a threat to the “used and useful” status of existing generation assets and to the utility’s future capital investment program, which is how they make basically all of their money right now.

Revenue decoupling can play an important role in overcoming some, but not all, of these limitations. With decoupling in place, we’d expect that the utility would be willing and able to earn the entire $30M performance incentive (which they have yet to do in any year) so long as it didn’t make regulatory compliance in future years more challenging by prematurely exhausting some of the easy DSM opportunities.